"Improvement of Trust System and Allowance of Investment Advisory"... Ko Seung-beom Permits Long-standing Requests of Banking Sector (Comprehensive)

Banking Sector Opens Path to Expand Non-Interest Income
Bank, Insurance, and Securities Functions Unified... Support for Digital Universal Bank

Financial Services Commission Chairman Ko Seung-beom is taking a photo with the heads of commercial banks attending the 'Chairman of the Financial Services Commission-Banking Industry Meeting' held at the Bankers Hall in Jung-gu, Seoul on the 28th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jin-ho Kim] The path has been opened for banks to enter the investment advisory business, which was previously limited to real estate. Additionally, the scope of trust assets that customers can entrust has been expanded, giving banks the opportunity to reinvent themselves as 'comprehensive asset managers.' This is the result of the Financial Services Commission allowing the banking sector's long-standing wish to expand non-interest income. Furthermore, it is expected that the launch of a digital universal bank, or 'super app,' enabling the use of all services such as banking, insurance, and securities through a single app, will become possible.

On the 28th, the Financial Services Commission held a 'Banking Sector Meeting' chaired by Chairman Seung-beom Ko, presenting three measures aimed at 'the future of banking and securing competitiveness.' Attendees included Chairman Ko, heads of seven major commercial banks (Jin Ok-dong of Shinhan Bank, Heo In, Kwon Kwang-seok of Woori Bank, Park Seong-ho of Hana Bank, Kwon Jun-hak of Nonghyup Bank, Lim Seong-hoon of Daegu Bank, Seo Ho-sung of K-Bank), and the chairman of the Korea Federation of Banks along with other related institution leaders.

Chairman Ko first stated that banks would actively expand their concurrent and incidental businesses to innovate their business models in response to the changing environment. Specifically, he mentioned improving the trust business system to enable banks to perform the role of comprehensive asset managers and opening the investment advisory business, which had been limited to real estate.

He added, "Regarding platform businesses operating as innovative financial services, we will review business performance and environmental changes to reasonably expand banks' incidental businesses." This is interpreted as opening the way for services such as KB Kookmin Bank's budget phone service, designated as an innovative financial service and currently operating temporarily, and Shinhan Bank's soon-to-be-launched food delivery platform to continue operating.

He also pledged active support for changes aimed at the digital transformation of banks. He emphasized, "We will create institutional conditions for a digital universal bank that provides all financial services through a single app," and "We will actively support investments in digital new businesses, including rationalizing network separation and promoting information sharing between financial and non-financial sectors." This means creating an environment where various tasks, from banking operations to insurance, can be conveniently handled through one app.

He also stressed the need to continue financial innovation based on fair competition. Financial companies, including banks, should lead changes as agents of financial innovation, and the government promised to make continuous efforts to create a fair competitive environment. Since his appointment, Chairman Ko has consistently advocated the principle of 'same function, same regulation' to resolve regulatory differences between financial companies and big tech firms.

Following Chairman Ko's opening remarks, various policy tasks to strengthen banking competitiveness were proposed during the meeting.

Senior Research Fellow Byung-yoon Lee of the Korea Institute of Finance pointed out, "Although recent banking management indicators are stable, competitive pressure from big tech and fintech continues to increase," and emphasized, "It is necessary to revise business conduct regulations under the principle of 'same function, same regulation' and allow flexible incidental businesses to strengthen digital capabilities."

Kim Hak-soo, President of the Korea Financial Telecommunications & Clearings Institute, and Kim Kwang-soo of the Korea Federation of Banks also requested the introduction of a small license system by categorizing banking operations by function and institutional support from financial authorities to grow into a digital universal bank.

In response, Chairman Ko said, "We will review the discussions from the meeting and consider policies for the development of the financial industry," adding, "We will continue to communicate with the sector and gather opinions to promote policies going forward."

This content was produced with the assistance of AI translation services.